The British economy is said to be on the brink of a recession and the value of the pound is plummeting versus the U.S. dollar.
According to the Associated Press, Britain’s economic output declined by 0.5 percent between July and September. It was the first time since 1992 that Britain’s economy has contracted, and the fall was greater than analysts’ prediction of a 0.2 percent drop.
The figures put Britain halfway into a technical recession — defined as two or more consecutive quarters of negative economic growth.
Earlier this week, British prime minister Gordon Brown and Bank of England governor Mervyn King said they believed the country was heading for a recession, causing both the pound and the stock market to fall. The pound fell 4.5 percent against the dollar to U.S. $1.5497. Word that Britain is officially on the brink of a recession significantly widened those drops.